In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500, then you would be sitting on a cool $1.2 million today.
Source: The Motley Fool
If you love money, this will blow your mind.
In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500 (^GSPC -0.74%), then you would be sitting on a cool $1.2 million today.
That equates to a total return of 120,936%.
The stock? None other than Gap (GPS 6.39%).
You read that right. According to an analysis of the "entire universe of U.S. based stocks publicly traded since 1980," M&T Bank found that the multi-branded retailer scored the top spot among all of the stocks that are currently on the S&P 500.
What's perhaps more interesting is that Gap was in exceptionally good company, as four of the top five S&P 500 components on the list were all retailers.
You can see evidence in the following graphic, which charts how much a $1,000 investment in 1980 would be worth with respect to each of these stocks today.
Coming in second is L Brands (BBWI 0.27%), the retail concern behind Victoria's Secret and Bath & Body Works, among others, with a compound annual growth rate of 22.9%. Third is TJX (TJX 0.02%), the "off-price apparel and home fashions retailer" behind T.J. Maxx and Marshalls, among others, with a CAGR of 22.8%. And in fourth place is Wal-Mart (WMT -0.18%), the world's largest retailer, with a CAGR of 21.9%.
It's also worth pointing out that all of these are, to varying extents, discount retailers that were positioned perfectly to take advantage of the Great Bull Market that got under way in 1982. And all of them have since grown alongside the American consumer. Their total returns (rounded to the nearest 1,000%) come out to be 90,000%, 88,000%, and 69,000%, respectively.
The lesson here is simple. The opportunity to invest in great companies coupled with the magical power of compounding returns can make prescient and patient investors very rich.
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What is the S&P 500 performance since 1980? ›
Stock market returns since 1980
This is a return on investment of 13,619.04%, or 11.74% per year. This lump-sum investment beats inflation during this period for an inflation-adjusted return of about 3,505.34% cumulatively, or 8.42% per year.
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The Motley Fool Stock Advisor stock picks also set a record with an average return since inception of 703% vs. the S&P500's 155%. That means that over the last 22 years their picks are beating the market by 548% so they are quadrupling the S&P500's return.
What is the average return of the S&P 500 in the last 50 years? ›
Stock Market Average Yearly Return for the Last 50 Years
The average yearly return of the S&P 500 is 11.35% over the last 50 years, as of the end of April 2024. This assumes dividends are reinvested.
What is the rule of 72 Motley Fool? ›
Let's say that you start with the time frame in mind, hoping an investment will double in value over the next 10 years. Applying the Rule of 72, you simply divide 72 by 10. This says the investment will need to go up 7.2% annually to double in 10 years. You could also start with your expected rate of return in mind.
What is everlasting stocks from Motley Fool? ›
The service offers recommendations for investment opportunities focusing on themes such as founder-leaders, company culture, or pricing power that provide companies with the sustained potential to beat the market over extremely long periods.
What is the 20 year return of the S&P 500? ›
The S&P 500 returned 345% over the last two decades, compounding at 7.7% annually. But with dividends reinvested, the S&P 500 delivered a total return of 546% over the same period, compounding at 9.8% annually. Investors can get direct, inexpensive exposure to the index with a fund like the Vanguard S&P 500 ETF.
What is the 30 year return of the S&P 500? ›
Looking at the S&P 500 for the years 1993 to mid-2023, the average stock market return for the last 30 years is 9.90% (7.22% when adjusted for inflation). Some of this success can be attributed to the dot-com boom in the late 1990s (before the bust), which resulted in high return rates for five consecutive years.
Is Motley Fool or Morningstar better? ›
So Motley Fool is better suited to long-term investors focused on high growth potential while Morningstar is preferable for quantitative investors who rely on metrics and models.
Is it worth it to buy a Motley Fool? ›
For investors looking for stock ideas and actionable guidance, Motley Fool is likely worth the reasonable annual fees. The stock research alone can pay for the membership cost if you invest in just a couple successful picks. However, more advanced investors doing their own analysis may not find sufficient value-add.
Zacks is better if you want quantitative analysis and short-term trading ideas. Motley Fool is preferable for fundamental analysis and long-term investing approach.
What is the rolling 5 year return of the S&P 500? ›
S&P 500 5 Year Return is at 70.94%, compared to 85.38% last month and 57.45% last year. This is higher than the long term average of 45.28%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.
What is the return of S&P in the last 40 years? ›
40 Years (1982 – 2022): 11.6% annual return. 30 Years (1992 – 2022): 9.64% annual return. 20 Years (2002 – 2022): 8.14% annual return. 10 Years (2012 – 2022): 12.74% annual return.
What is the 15 year average return on the S&P 500? ›
Overall, the S&P 500 grew at a compound annual growth rate of 13.8% over the last 15 years. Adjusting for inflation, the index grew 11.2% per year during that period.
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What is the perfect 10 stock? ›
The aggregated results are distilled into a single score, a simple rating on a scale of 1 to 10, letting investors know at a glance the likely course forward of any given share. A 'Perfect 10' is a clear indicator that a stock deserves a closer look, based on the data.
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